Entrepreneurship Promotion Fund ESF resources to promote business start-ups, entrepreneurship and new jobs creation in Lithuania

Audrius Zabotka, member of the fi-compass expert group

Year 2009

GDP 14.8 %

Unemployment 13 % 2009

( 18.2 % 2010)

No access to finances for start-ups, especially for socially sensible

groupsInstrument to facilitate start-ups financing

and job creation

?

Entrepreneurship Promotion FundESF, Human Resources Development Programme

Open CreditsFund

EUR 51.3m

Small Credits_2

EUR 27.5m

FEIs and other measures funded by ERDF and reflows

INVEGA fund (HF)

EUR 196mEntrepreneurship

Promotion Fund EUR 14.5m

Entrepreneurship PromotionEUR 14.5m

FEIs and other measures funded by

ESF

Guarantee Fund -

Individual guarantees

EUR 37.4m

Global Grant Compensation of Interest

EUR 16.2m

Baltic Innovation Fund BIF

EUR 20m

FRSP

EUR 110m

FLPG

EUR 15.2m

Global Grant for First JobEUR 9.3m

Grants for Enterpreneurship

Promotion EUR 2.9 m

Individual guarantees 3

ConsultationsIndividual counseling on business plan provides training service providers

HF - Entrepreneurship Promotion Fund

EUR 14.5m

Microcredit< EUR 25,000

INVEGA

FEI: MicrocreditingAmount dedicated

EUR 13.2m

CUs

Final recipients

General TrainingBasics of Entrepreneurship

Entrepreneurship TrainingBusiness Plan TrainingAccountancy and tax basicsBusiness and labor law basicsBusiness management basicsMarketing basicsStaffs management in Business

Budget: LTL 50 million (EUR 14.48 million) HF manager: INVEGA Financial intermediary: Consortium of 57 CU led by LCCU (international

public procurement) Final recipients: start-up companies and individuals < 12 month Microcredit < EUR 25,000. 90 % ESF contribution / 10 % CU resources Interest rate for final recipients: 3 months VILIBOR + 0,1% (2 %; 6 %)

+

HF - Entrepreneurship Promotion Fund

EUR 14.5m

Microcredit< EUR 25,000

INVEGA

FEI Microcrediting > EUR 13.5m

CUs

Final recipients

Chart1

0.130614.5

0.486114.5

1.309814.5

1.890314.5

2.41314.5

2.620414.5

3.935214.5

4.799514.5

5.72414.5

6.442314.5

7.753314.5

8.721814.5

9.39414.5

11.210214.5

13.479814.5

14.447414.5

15.453814.5

16.114.5

16.614.5

16.9914.5

Amount of EPF resources disbursed through microloans, EUR m

ESF amount paid to EPF EUR m

Sheet1

2010 IVq2011 Iq2011 IIq2011 IIIq2011 IVq2012 Iq2012 IIq2012 IIIq2012 IVq2013 Iq2013 IIq2013 IIIq2013 IVq2014 Iq2014 IIq2014 IIIq2014 IVq2015 Iq2015 IIq31-07-2015

Amount of EPF resources disbursed through microloans, EUR m0.10.51.31.92.42.63.94.85.76.47.88.79.411.213.514.415.51616.616.99

ESF amount paid to EPF EUR m1515151515151515151515151515151515151514.5

per mn. Tkst. EUR130.6355.5823.7580.5522.7207.41314.8864.3924.5718.31311968.5672.21816.22269.6967.61006.4

Suminis0.13060.48611.30981.89032.4132.62043.93524.79955.7246.44237.75338.72189.39411.210213.479814.447415.4538

2010 IVq2011 Iq2011 IIq2011 IIIq2011 IVq2012 Iq2012 IIq2012 IIIq2012 IVq2013 Iq2013 IIq2013 IIIq2013 IVq2014 Iq2014 IIq2014 IIIq2014 IVq2015 Iq2015 IIq

Issue of microcredits by quarters, EUR thousands

Chart1

130.6

355.5

823.7

580.5

522.7

207.4

1314.8

864.3

924.5

718.3

1311

968.5

672.2

1816.2

2269.6

967.6

1006.4

611.8

540

390

Category 1

Sheet1

2010 IVq2011 Iq2011 IIq2011 IIIq2011 IVq2012 Iq2012 IIq2012 IIIq2012 IVq2013 Iq2013 IIq2013 IIIq2013 IVq2014 Iq2014 IIq2014 IIIq2014 IVq2015 Iq2015 IIqJul 2015

Category 1130.6355.5823.7580.5522.7207.41314.8864.3924.5718.31311968.5672.21816.22269.6967.61006.4611.8540390

Category 22.54.42

Category 33.51.83

Category 44.52.85

To update the chart, enter data into this table. The data is automatically saved in the chart.

Results achievedName of the indicator Results as

of 31 July

2015

Measure monitoring

indicator

Implementation

Number of the individuals attended the trainings

4979 5000 99.6 %

Number of the individuals successfully completed training

4867 4500 108.2 %

Number of the individuals from the priority groups attended the trainings

3127 1500 208.5 %

Number of loans (disbursed by CU) 1229 1200 102.4 %

Number of individuals/enterprises from the priority groups received loans

586 180 326 %

Number of jobs created 2884* 1000 288 %

*At the end of 2014

Results of EPF Amount of loans paid to final recipients (as of 31 July 2015):

Total EUR 18.88m (133 % total OP contribution ) EPF resources EUR 16.99m (117 % OP contribution ) CUs resources EUR 1.89m

Minimum loan granted EUR 579,2 Average loan granted EUR 15,4 thousand Purpose of the loan: for investments (72 %), for working capital (28 %) Loan recipients: legal persons (83 %), individuals (17 %) 53 % of EPF microcredits received INVEGAs guarantee Microcredits by Priority groups:

37 % - youth under 29 years 8 % - elder above 50 years2 % - unemployed1 % - disabled

Lessons learnedIt takes time to implementFrom the idea till the HF agreement 9 monthsFirst trainings started within 9 months after the signature of the HF agreementFirst loan issued within 11 months after the signature of the HF agreement

But it worth to start and wait patiently for long lasting results!Survey of EPF startups about business creation: - 82 % positive, 15 % cant say for this momentPlans for 2015: - 50 % increase number of employees, 46 % keep the same number of

employees

Outlook for 2014-2020 After 2018 reallocation of reflows from EPF for another

instrument Modified EPF_2:

main objective to help people become self-employed or to set-up a company

encourage the creation of new jobs focus on persons with difficulties in labor market

9 month to start EPF. Actual timetableActivities Date

Governmental resolution (to MoSSL: consider possibility of introducing new FEI scheme under ESF)

4 March 2009

Changes of HRD OP:

Approved by the Monitoring Committee 7 April 2009

Approved by the European Commission 17 July 2009

Approval of HRD OP Complement (description of new FEI measure) by the Government

22 July 2009

Selection criteria`s approved by the Monitoring Committee 15 September 2009

Discusion on and drafting an agreement between MoSSL, MoF and INVEGA

September -December 2009

Letter of MoSSL to the MoF concerning selection of HF (art 44 b) of Reg. 1083/2006)

24 December 2009

Implementation of EPFActivities Date

Signature of the agreement between Ministry of Social Security and Labour, Ministry of Finance and INVEGA

30 Dec 2009

1st Steering Committee of EPF meeting took place 17 February 2010

International public procurement launched 31 March 2010

Agreement between INVEGA and Consortium of CU signed 30 July 2010

First trainings started 20 September 2010

First loan issued 8 November 2010

95% compensation of interest (Ministry of Economy) 27 January 2012

Global grant measure: partial compensation of salary 30 September 2013

Thank you

www.fi-compass.eu

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